Canadian auto parts maker Magna International Inc. posted better-than-expected earnings on Friday, returning to profit in the third quarter as its key customers ramped up production to meet recovering demand for new cars in Europe, China and the United States.
The Ontario-based company also raised its 2020 sales outlook to $31.5 billion-$32.5 billion from $30 billion-$32 billion. Analysts were expecting $31.4 billion, according to Institutional Brokers' Estimate System data from Refinitiv.
Auto sales in North America have gradually recovered since lockdown measures were eased, prompting major automakers to ramp up production and rebuild inventories for high-margin sport utility vehicles and pickup trucks.
That has lifted sales at several auto suppliers including Magna, which makes parts such as body structures, chassis and powertrain for customers including Ford Motor and Volkswagen.
Magna also raised its 2020 North American light vehicle production outlook to 12.7 million units from 12.5 million. In Europe, it now expects full-year production to be about 16.1 million units, compared with 15.9 million before.
Last week, auto technology supplier Aptiv PLC also forecast better-than-expected results for 2020 and gave a bullish outlook for growth for its electrification and assisted driving technology.
Magna’s light vehicle production was down 5 per cent in Europe, flat in the United States and rose 10 per cent in China during the third quarter. In the prior quarter, production in Europe and the United States had slumped 59 per cent and 70 per cent respectively, while it was up 3 per cent in China.
Magna reported a net income of $405 million, or $1.35 a share, for the third quarter ended Sept. 30, compared with a loss of $233 million, or 75 cents, a year earlier.
On an adjusted basis, it earned $1.95, while analysts were expecting $1.33.
Total sales fell about 2 per cent to $9.13 billion.
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